Buffett’s shareholder letter dangles clues

Heidi Moore Feb 27, 2012

Kai Ryssdal: The big happening over the weekend, for the stock-picking types among you, came early Saturday morning, when Warren Buffett released his annual letter to shareholders of Berkshire Hathaway. He talked about his investments, as he always does. He said his successor has already been picked. He didn’t say who it is; apparently even the Chosen One doesn’t know it yet. Everybody on Wall Street watches the Buffett letter, the same way the rest of us watch Apple’s newest product launch. There’s hype and anticiaption; excitement; a lot of sleuthing to figure out what it might be.

But, why? Our New York bureau chief Heidi Moore has that story.

Heidi Moore: Investors comb over Warren Buffett’s annual letter like detectives following a trail of evidence. Today, the 81-year-old investor gave them a really juicy clue: the company has chosen his successor. But that’s not why Whitney Tilson analyzed every word of the report.

Whitney Tilson: There’s a lot of wisdom that can help you just think better.

Tilson manages more than $200 million and Berkshire Hathaway stock is his biggest investment. He considers the report an education in business, the same way Apple fanatics hung on every word uttered by Steve Jobs.

Tilson: I was able to learn investing by reading all of Buffett’s letters going back to 1958, by attending his annual meeting every year for 13 years.

David Kass is a professor at the University of Maryland’s Smith School of Business. He said this year’s report had a surprising stock tip.

David Kass: He made some very positive comments about the banking sector having recovered; it’s in much better shape now than it was earlier.

Buffett has poured billions of dollars into Wells Fargo, Bank of America, and JP Morgan. No wonder he raved about them.

He did eat some crow: he said he was “dead wrong” in predicting a housing recovery. Investor Michael Yoshikami says Buffett’s mistakes are often more educational than his successes.

Michael Yoshikami: People look forward to someone who’s been a brilliant investor for decades admitting they’re wrong.

But he’s still an elusive genius. Today, he said his successor doesn’t know he’s been chosen yet.

How mysterious.

In New York, this is Heidi Moore for Marketplace.

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